Ring-fencing UK banks will have IT ramifications, says expert

ICB report on the ring-fencing of high street banks will result on IT system refreshes, according to an industry watcher

Today's report from the Independent Commission on Banking (ICB) recommending structural splits will result in IT system changes, according to an industry expert.

The ICB report recommends that UK high-street banks should structurally split from their investment banking arms, in an effort to protect one side of the business from the possible risks of the other.

The separation would take around "three to five years", according to David Sherriff, CEO of enterprise solutions and products provider Microgen.

Sherriff said that the report's recommendations would result in IT system changes at many banks.

"Banks will be required to untangle complex business processes that are supported by a myriad of technology, data, applications, infrastructure and networks.

"The complexity and ever-increasing transaction volumes should not be used as mitigating factors to avoid the systems change that is long overdue, for both business and regulatory reasons."

The report argues that there is a pressing need for ring-fencing as it will make it "easier to sort out both ring-fenced and non-ring-fenced banks which get into trouble, without the provision of taxpayer-funded solvency support."

The report also argues that the move would make it easier for banks to prioritise the safety of customers' funds.